Department of Justice Seal

FOR IMMEDIATE RELEASE

CIV

MONDAY, DECEMBER 4, 2000

(202) 514-2007

WWW.USDOJ.GOV

TDD (202) 514-1888


JUSTICE DEPARTMENT INTERVENES IN SUIT AGAINST

KPMG PEAT MARWICK FOR PREPARING FRAUDULENT
MEDICARE & MEDICAID COST REPORTS


WASHINGTON, DC -- The Department of Justice announced today that it has intervened in a lawsuit filed against KPMG Peat Marwick in Tampa, Florida under the False Claims Act for preparing false hospital cost reports that were submitted to Medicare and Medicaid. The suit alleges that the reports were submitted by KPMG from 1990 to 1992 on behalf of Basic American Medical Inc. (BAMI) and Columbia Hospital Corporation (now known as HCA-The Healthcare Company).

According to Assistant Attorney General David W. Ogden of the Civil Division and Donna Bucella, United States Attorney for the Middle District of Florida, the complaint alleges that KPMG prepared cost reports that included false claims for reimbursement for five Florida hospitals owned by BAMI that were acquired by Columbia in 1992.

"The intervention today by the Justice Department in this suit demonstrates the government's determination to combat health care fraud not only by providers but also by consultants who prepare false claims that are submitted to Medicare," said David W. Ogden, Assistant Attorney General of the Department of Justice's Civil Division.

The complaint further alleges that KPMG prepared "reserve cost reports," internal documents identifying the falsely claimed costs included in the filed cost reports. The complaint alleges that the purpose of the reserve cost reports was to set aside funds to repay the government in the event the unallowable costs were eventually discovered.

"When allegations are made that false claims are being submitted for payment by Medicare, they will be fully investigated and all parties responsible will be aggressively prosecuted," said Donna A. Bucella, the United States Attorney for the Middle District of Florida.

The suit was initially brought by John Schilling, a former Supervisor for Reimbursement for the Southwest Florida Division of Columbia. Under the False Claims Act, those who file false claims against the federal government may be subject to three times the damages caused and penalties of $5,000 to $10,000 per violation. Under certain circumstances, the whistleblower is entitled to a portion of the government's recovery. The case has been investigated by the Federal Bureau of Investigation in Tampa.

The lawsuit is filed in the Middle District of Florida as United States ex rel. Schilling v. KPMG Peat Marwick, No. 98-901.

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